Theory of Change

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infographic representing theory of change

Nonprofits are often founded by an individual or a group that has identified a social or environmental challenge and believes that it knows the best way to successfully address it. That, in a nutshell, is a “theory of change.” Increasingly, funders ask prospective grantees to articulate their theory of change. It’s a good idea to have one prepared because you can use the language whenever you need to make a case for support to a prospective donor.

Why does my nonprofit need a Theory of Change?

A “Theory of Change” is an individual or group’s thesis about how a particular strategy can achieve measurable impact to address a social or environmental challenge. A Theory of Change is sometimes also called a “logic model”: if we do program X, we can expect outcome Y.

In younger organizations, the theory may still live in the founders’ heads. They run a program or build an organization to implement their theory. But here’s why translating the founding idea into a formal, written, Theory of Change is important:

  1. When you make the case for your program’s value to prospective participants, you need to explain: why choose us? Why is this particular program that advocates for immigrants’ rights, plants a community garden, or teaches soccer to kids, the right program for them? Other organizations may offer similar programs but do so differently. Why is yours effective?
  1. When you make the case to prospective funders, whether a foundation program officer or your local elected official, you need to explain: why fund us? Why is this particular program that feeds hungry families, provides afterschool homework help to latchkey kids, or offers respite to family healthcare providers deserving of support? There are many worthy causes. What makes your strategy particularly efficient and effective?
  1. When you make the case to prospective board members to take a role as a volunteer leader, you need to answer their question: why this board for me? Why should I devote my time and resources to the fight for racial equity, offering arts in underserved communities, or battling climate change? Time is precious. What makes a commitment to this nonprofit truly compelling?

Here’s another good reason to construct a Theory of Change: it helps you evaluate whether your program is, in fact, having the impact you desire. Crafting a solid Theory of Change checks you on the soundness of your logic.

Core Elements

Think back to when you learned to formulate a hypothesis in science class. A hypothesis is a basic IF/THEN statement: IF I do X, THEN Y should result. For example: If we teach soccer to kids, then it will improve children’s health and teach them to value teamwork.

Build your Theory of Change with the basic IF/THEN formula in mind. Here are the component parts:

Problem Statement. Begin with a statement of the problem or challenge your organization was founded to address. What did you see that led you to act? What data do you draw upon to understand the issue? What other strategies have been attempted in the past?

Inputs. List the resources that you bring to address the challenge. These are typically called “inputs.” Inputs can include funding, staff, volunteers, expertise, relationships, facilities, technology, curriculum, etc.

Strategies. Articulate your major strategies, also called “throughputs,” and why you are uniquely qualified to implement them. Strategies can include programs, classes, exhibitions, clinical sessions, volunteer opportunities, travel experiences, advocacy campaigns, etc.

Audiences. Identify the specific audiences that your strategies are designed to reach, serve or engage. You might identify your current audiences and your desired or target audiences if you intend to grow or broaden your purview.

Outputs. Outputs are what your strategies produce. Typically, they can be measured quantitatively. For example, how many days do we run afterschool soccer programs, at how many sites, with how many kids, representing how many families? In the nonprofit sector outputs are often mistakenly presented as “outcomes.” But outputs are something we produce, not something we achieve. In our example, we are trying to achieve a healthier community, with kids who know how to work well with others. Our strategy to achieve that is to run soccer programs – our output.

Outcomes. Outcomes, both short-term and long-term, are what we’ve impactfully achieved. In the afterschool soccer program example, how do you describe what kids have taken from our soccer program? Short-term, are the kids more energetic? Less prone to illness and injury? Able to resolve conflicts with peers more easily? Long-term outcomes might be measured over many years: have our participants remained active and healthy over the course of their lives? Have neighborhood health statistics improved as a result of our work? Long-term outcomes are far more difficult to measure, but important to articulate, nonetheless.

Putting Your Theory of Change to Work

A Theory of Change is a hypothesis. In order to prove its veracity, a theory must get tested over time to verify its success and the depth of its impact. An evaluation tool or formal study should measure both outputs and outcomes. But it is the outcomes that matter more because they are a record of impact.

Let’s take an afterschool soccer program, for example, that is designed to improve the health of neighborhood children and teach teamwork skills. Once we’ve taught soccer to kids, we should see evidence of both improved health and teamwork. Positive metrics should give us confidence in our Theory of Change. Negative results should force us to evaluate why we missed the mark, and whether the misstep occurred at the level of understanding the challenge itself, the quality of your theory, the available inputs or the chosen strategies:

  • Maybe we didn’t have sufficient or appropriate resources for the program. Perhaps we had only one instructor for every 50 kids. Maybe the kids didn’t have their own soccer balls with which to practice.
  • Maybe the program itself wasn’t designed properly. Perhaps our instructors are expert soccer players, but never learned how to teach soccer effectively, or teach to the age group we are targeting.
  • Or maybe soccer was the wrong choice to improve children’s health in the neighborhood because baseball is the game of choice, and so generating sufficient interest was a problem.
  • Or maybe the program is fabulous, and improves participants’ health, and improves their teamwork skills… but only served three kids because it wasn’t sufficiently advertised. Great outcomes, but not great scale or reach.

A Theory of Change helps you determine if you are having the impact you intended and helps guide you in making improvements over time.

Some foundations require you to provide a Theory of Change as part of a grant application. Some ask for it as a separate document, and some implicitly ask you to explain it through the questions they pose in their request for proposals. Having your basic Theory of Change written down serves a multiplicity of purposes: use it to recruit program participants, solicit funders, appeal to prospective board members, measure your effectiveness, evaluate your weaknesses, and celebrate your success. Repurpose it for grant proposals, gift solicitations, website copy, and as talking points to use with different audiences.